$32.7MM in Financing Arranged for Six-Building Portfolio Sale in Silicon Valley

CBRE, Kennedy Wilson, Silicon Valley, DRA Advisors
Image Courtesy of CBRE

(EDITOR’S NOTE: According to previous reporting by The Registry, the seller of the portfolio was DRA Advisors LLC.)

SAN JOSE, Calif. – Sept. 23, 2020 – CBRE announced the sale and financing of a six-building Silicon Valley research and development portfolio. CBRE Capital Markets in Northern California represented both the seller and the buyer, Kennedy Wilson of Beverly Hills, Calif. The 257,453-sq.-ft. portfolio is 100-percent leased to 15 diversified tenants. 

CBRE Capital Markets’ Debt & Structured Finance team led by Brad Zampa, Mike Walker and Megan Woodring arranged the $32.7 million, seven-year, fixed-rate acquisition financing at a competitive interest rate on behalf of Kennedy Wilson. Financing was provided by a domestic bank. Scott Prosser, Joseph Moriarty, Jack DePuy and Russell Ingrum of CBRE represented the seller. 

“The debt capital markets continue to heal, particularly for stabilized assets with little near-term rollover. We generated multiple bids from Life Co’s, Regional Banks, Community Banks and CMBS shops. Ultimately, we chose a regional bank who offered best pricing and leverage at pre-COVID-19 levels. We continue to see more and more liquidity in the debt space and fully expect that trend to continue into the fourth quarter,” stated Brad Zampa, Executive Vice President, CBRE.

Due to limited availability of undeveloped land, the Silicon Valley R&D and industrial markets have undergone significant redevelopment that has resulted in a large number of buildings being torn down to make way for new high-rise office buildings, residential and mixed-use projects. Over the past eight years, 354 buildings, totaling 18.4 million sq. ft., have been demolished in Silicon Valley. Redevelopment activity has been highest in North San Jose along the Highway 101 Corridor, where over 13 million sq. ft. have been torn down to make way for high-density office, residential and mixed-use projects. 

“South San Jose is a major beneficiary of Silicon Valley’s R&D and industrial redevelopment, as displaced tenants from the northern submarkets are forced to seek space elsewhere in Silicon Valley. South San Jose is more attractive than many competing submarkets to displaced R&D and industrial tenants as it offers newer, more efficient and more functional industrial and R&D buildings,” added Joseph Moriarty, Executive Vice President, CBRE.

The portfolio benefits from access to Highways 101 and 85, and close proximity to Santa Clara Valley Transportation Authority’s Santa Teresa light rail station and the Blossom Hill Caltrain Station. Additionally, more than 400,000 sq ft of new retail has been completed near the portfolio, including Village Oaks.

Less than a few miles from the portfolio is the Cottle Transit Village, where nearly 3,000 residential units were recently developed. Additionally, Pulte Homes has commenced the phased construction of approximately 720 single-family and multifamily homes near the portfolio.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.

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